BT Offers Discounts to Prompt Customer Switch to Fiber

BT Offers Discounts to Prompt Customer Switch to Fiber
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BT Group is offering discounts to communication providers to get their customers onto faster broadband services, part of a push to boost internet speeds across Britain, according to Bloomberg.

Openreach, the infrastructure unit of the former phone monopoly, is offering wholesale customers that use the grid cheaper prices than the maximum set by regulators if they bring subscribers onto services that use fiber, rather than copper.

BT is getting on board with a government goal for an expedited fiber rollout, to help Britain narrow the gap with countries like Spain and Portugal, after years resisting the call to speed investments. Openreach was forced to legally separate from the broader company last year by regulators as they attempted to spur spending, part of a discord that weighed on BT’s stock, contributing to the ouster of CEO Gavin Patterson.

The offer announced by Openreach follows its previous backlash against price cuts imposed by regulator Ofcom for some of its most popular broadband services. Ofcom, however, said separately that it recognized that carriers spending on full-fiber services need to make a fair return on risky, long-term investments.

Openreach’s offer comes on the heels of a government telecom infrastructure plan, which called for a full-fiber rollout to 15 million buildings in the U.K. by 2025. Britain only has 4 percent of its buildings fully connected to fiber, compared with 71 percent in Spain and 89 percent in Portugal, according to the document.

Openreach will take a hit to its revenue and earnings from the discounts in the order of “high tens of millions of pounds,“ for the 2018-2019 fiscal year, it said in a statement. The move isn’t expected to change BT’s financial outlook.